Cost optimization based on joint economic lot size model by incorporating transportation costs for single sullpier-purchaser
The increasing focus on supplier-purchaser coordination has become an essential issue to be managed efficiently in optimizing supply chain's performance. Procurement scenario indicates that most of supplier and purchaser have emphasized their effort in effective decision for inventory replen...
Saved in:
| Main Author: | |
|---|---|
| Format: | Thesis |
| Language: | English English |
| Published: |
2014
|
| Subjects: | |
| Online Access: | http://eprints.utem.edu.my/id/eprint/15004/1/COST%20OPTIMIZATION%20BASED%20ON%20JOINT%20ECONOMIC%20LOT%20SIZE%2024pages.pdf http://eprints.utem.edu.my/id/eprint/15004/2/Cost%20optimization%20based%20on%20joint%20economic%20lot%20size%20model%20by%20incorporating%20transportation%20costs%20for%20single%20supplier-purchaser.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | The increasing focus on supplier-purchaser coordination has become an essential issue to
be managed efficiently in optimizing supply chain's performance. Procurement scenario
indicates that most of supplier and purchaser have emphasized their effort in effective
decision for inventory replenishment independently. Instead of independent decision, Joint
Economic Lot Size (JELS) model has been proposed as the representation of coordinated
decision between supplier-purchaser. The main objective is to minimize joint total cost of
supplier and purchaser by jointly deciding the optimal order quantity, batch production lot,
and number of deliveries. Determination of inventory replenishment need to consider
transportation as the function of shipment weight and haulage distance that simultaneously
emulate freight rate schedules and two modes of transportation namely Truckload (TL) and
Less than Truckload (LTL) shipment. Hence, this study proposes to incorporate
transportation or freight cost function into JELS model. There are three proposed models in
this study, namely: (i) JELS-Inverse (JELS-I) for emulating TL shipment, (ii) JELS
Adjusted-inverse (JELS-A) for emulating LTL shipment, and (iii) JELS Lot-splitting
(JELS-L) for minimizing joint total cost if the transportation is limited based on TL and
LTL shipment. JELS-I and JELS-A constitutes the analytical mathematical model that
validated using sensitivity analysis to analyze the robustness of the model. JELS-L is a
model based Heuristic optimization approach to search solution within the interval solution
of JELS-I and JELS-A. The models are examined by the numerical example for analyzing
its feasibility in deriving the solution. The result shows that JELS-I provides a large order
quantity but a small number of deliveries, otherwise, JELS-A yields smaller order quantity
but a higher number of deliveries. Both models only resulting minimum joint total cost in
the case of TL and LTL shipment meanwhile JELS-L performs better result than other
models in minimizing joint cost. The models tested by experimenting the wide range of
model parameter in order to analyze the effectiveness of the model in yielding a best
solution to minimize joint total cost. The experimental result shows that JELS-L provides a
smaller deviation toward the best solution rather than another model. It can be indicated
that JELS-L model successfully gives promising results in a coordinated decision of the
supply chain. |
|---|